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Gulf spill creates distrust of industry: TransCanada

Sandy Barnick's land near Glendive, Mont., is a long way from the vast and growing oil slick now staining the Gulf of Mexico. But these days, she feels as if it's just over the horizon.

The Gulf blowout happened despite repeated safety assurances from the industry. What's to prevent a similar disaster happening here, she asks, where a Canadian company hoping to build a pipeline for Canadian oilsands bitumen is using the same words?

"It just amplifies what our concerns have been all along," said Barnick about TransCanada's (TSX: TCP) Keystone XL proposal, now before U.S. regulators. "The verbiage used in the impact studies for that oil well down in the Gulf is almost word for word the same that we're getting regarding this pipeline."

She's heard the promises: Chances of a spill are minimal. If there is a spill, it will be contained quickly. It will not affect the environment.

But after the Gulf, she no longer believes them.

"Look at the devastation that it's caused. We're this little speck in the country trying to protect our livelihood. Look what's happened already down in the Gulf. If something like that happened, our livelihood is gone."

Barnick is one of a number of farmers and ranchers along Keystone XL's 3,200-kilometre proposed route whose resolve to fight the plan has been stiffened by the Gulf blowout.

The spill -- and BP's response -- has damaged the credibility of the whole industry, said Jenny Pelej of the National Wildlife Federation, who attended many of the hearings from Montana to Nebraska.

"It's about safety concerns and trust of Big Oil in light of the oil spill in the Gulf," she said.

It's not fair, said Robert Jones, TransCanada vice-president in charge of Keystone XL. But it's true.

"It's completely unfair to compare a public utility (pipeline) of something that we've been doing for over a hundred years to deep water offshore exploration for crude oil," he said. "They are not comparable.

"But as they see the spill, it does make people question regulators and the promises of big corporations."

That would describe Paul Siemens, whose farm south of Draper, South Dakota, would be on the pipeline route.

"Any time you get a big corporation coming in and promising you all sorts of stuff, you've gotta be leery of it," said Siemens.

"Just because they're big doesn't mean they're trustworthy. BP was even a bigger company that promised people nothing would go wrong."

Construction on Keystone XL, part of a US$12-billion pipeline system to oilsands bitumen to southern refineries, is expected to begin around the beginning of 2011, with startup targeted for 2012 or 2013.

"I would suggest most of the folks that have asked for more questions would be the environmental NGOs," said Jones.

Jones defends Keystone XL, saying pipelines are by far the safest way to move oil. He insists that the Keystone system is needed, pointing to the fact most of its 1.3-million barrel per day capacity is already spoken for.

"We really look forward to moving ahead and building the pipeline," he said. "We're in the national interest."

But John Harter, a South Dakota farmer and rancher, can't help thinking about what happened in the Gulf, despite all the promises.

"If (Keystone) leaks, we're going to have a severe water problem," he said. "I guess I would compare it to what's going on down in Louisiana.

"I think this pipeline is being built out of greed, not out of need."

Photos

A brown pelican covered in oil sits on the beach at East Grand Terre Island along the Louisiana coast on Thursday, June 3, 2010. Oil from the Deepwater Horizon has affected wildlife throughout the Gulf of Mexico. (AP Photo/Charlie Riedel)